Westbury in agreed bid for Prowting

Thursday 16 May 2002 23:00 BST

HOUSEBUILDER Westbury has agreed to buy rival Prowting for £141m in cash. The firm is offering 180p for each Prowting share, a premium of around 37%, to create a group currently valued by the market at more than £500m.

It has already secured backing from shareholders who hold 63% of the stock, including Peter Prowting, son of the company's founder. Shares in Prowting rose sharply on Thursday after it said it had received an approach that might lead to an offer.

The stock climbed a further 27p to 177 1/2p in early trade, a year high, while Westbury put on 11 1/2p to 353 1/2p, also a high.

Westbury said the deal would boost earnings in the year to February 2003. It predicted significant savings from cost-cutting in administration - in other words, job losses. It expected to save more than £7m in 2003/2004. There would be one-off costs of around £4.5m to achieve those savings.

'Prowting is an excellent strategic acquisition for Westbury,' said chairman Geoffrey Maddrell. 'It allows us to strengthen our presence in South West and South East England and reinforce our already strong position in the Midlands.' The group would have an output of approximately 5,000 houses a year.

The two companies have already shared a chief executive. Former Westbury boss Richard Fraser took over as chief at Prowting in January after Steve Rosier quit following a profits warning.

The bid boosted shares in fellow housebuilders in early trade, with Wilson (Connolly) climbing 9 1/2p to 193p, Berkeley Group 10p to 807 1/2p, and Bellway 3 1/2p to 528 1/2p.